This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Here's What We Think We Know About the Next iPad

SAN FRANCISCO (TheStreet) -- Apple (AAPL) has been seeing slowing iPad sales and will be looking to reinvigorate growth from its second-biggest product line. The iPhone is obviously the company's best-selling product and a new version is expected in the fall. However the next iPad is likely to prove whether or not tablets can really overtake the PC. 

In Apple's fiscal second-quarter, the company shipped just 16.4 million iPads, generating $7.6 billion in revenue. Both revenue and units shipped fell sharply, with revenue falling 34% sequentially and 13% year over year, and shipments falling 37% sequentially, and off 16% year over year.

On the earnings call, CEO Timothy D. Cook noted the reasons for the slowdown in sales. "First, in the March quarter last year, we significantly increased iPad channel inventory, while this year we significantly reduced it," Cook said on the earnings call. He also noted that last year, in the December quarter, there was a "substantial backlog with iPad mini that was subsequently shipped in the March quarter," whereas this year Apple had a supply and demand balance.

Here's What We Think We Know About the Next iPhone

3 Lessons Lululemon and American Apparel Need to Learn

How Delta Plays Politics in Washington: Who Needs Eric Cantor?

Despite this perceived slowdown, Cook noted Apple continues to believe in the tablet market. "We continue to believe that the tablet market will surpass the PC market in size within the next few years and we believe that Apple will be a major beneficiary of this trend," the CEO said.

The concern about the tablet market has been that larger smartphones, particularly those known as "phablets," can do everything a tablet can, as well as make calls, providing little reason for consumers to keep purchasing them in droves.

Research firm IDC recently lowered its projections for the tablet market this year, as it now expects 245.4 million tablets (including 2-in-1 devices such as the Microsoft (MSFT) Surface Pro) for 2014, down from a prior view of 260.9 million units, up just 12.1% year over year, citing the rise of tablets.

"Two major issues are causing the tablet market to slow down. First, consumers are keeping their tablets, especially higher-cost models from major vendors, far longer than originally anticipated. And when they do buy a new one they are often passing their existing tablet off to another member of the family," said Tom Mainelli, Program Vice President, Devices & Displays at IDC in the May forecast. "Second, the rise of phablets -- smartphones with 5.5-inch and larger screens -- are causing many people to second-guess tablet purchases as the larger screens on these phones are often adequate for tasks once reserved for tablets."

Following the successful branding of the iPad Air, Apple is expected to keep the iPad Air name, as it gets set to refresh the tablet line (Apple currently sells 4 iPad models), perhaps as soon as this fall. Here's what consumers and investors alike can expect to see from Apple, as it looks to build on the initial success of the iPad, and reinvigorate iPad revenue growth for shareholders.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,029.33 -1.81 -0.01%
S&P 500 1,986.88 +2.75 0.14%
NASDAQ 4,519.54 +0.6380 0.01%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs